Hedge-Fund Clients Pulled $74 Billion in January, TrimTabs Says

Date: Thursday, February 19, 2009
Author: Sree Vidya Bhaktavatsalam, Bloomberg.com

Hedge-fund investors withdrew $74 billion in January as the economy worsened and equity markets fell, according to a report from TrimTabs Investment Research.

The withdrawals were the second highest on record, after $117 billion of outflows in December, the Sausalito, California- based firm said. Investors have pulled $315.6 billion from hedge funds since September, according to data compiled by TrimTabs.

Investment losses and redemptions reduced hedge-fund assets to $964 billion as of Jan. 31 from $1.9 trillion in May, TrimTabs said. Customers removed money from 13 of 14 fund categories, led by $20 billion in outflows from those that invest in companies going through events such as takeovers. Funds that only buy stocks attracted $2 billion, TrimTabs data show.

Hedge funds rose by an average of 0.3 percent in January, TrimTabs data show. The Standard & Poor’s 500 Index lost 8.4 percent, including reinvested dividends. The flow data is based on a survey of 717 hedge funds, TrimTabs said.

To contact the reporters on this story: Sree Vidya Bhaktavatsalam in Boston at sbhaktavatsa@bloomberg.net.